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Energy revenue to fill gap in budget

Gov. Bill Ritter plans to tap into tax revenues from oil and gas production to close another budget shortfall, the governor announced Monday.

His plan to close a $60 million gap includes transferring money meant for other uses, about two-thirds of which would come from revenue the state collects from severance taxes and federal mineral leases.

As a result, grants that were to be awarded to local governments this year will be suspended “until further notice,” said Linda Rice, spokeswoman for the Colorado Department of Local Affairs, which administers the grants.

The governor plans to take $31.4 million from two DOLA grant programs. He also intends to transfer $9.4 million from federal mineral leases that are used to pay for maintenance projects on the state’s college campuses.

Additionally, Ritter will use $9 million from medical marijuana registrations, and $3.5 million from the Secretary of State’s cash fund to balance this year’s budget.

On top of that, the governor also plans to cut $1.3 million from the Department of Correction’s budget, and impose a $4.9 million, or 1 percent, across-the-board reduction in personnel costs for all state agencies. While that will mean not filling government vacancies, Ritter is not proposing more unpaid furlough days for state workers.

Ritter said an unexpected $76.8 million increase in income tax revenues last month and a $144 million extension in Medicaid funding from Congress kept the shortfall from being worse.

In a letter to members of the Legislature’s Joint Budget Committee on Monday, Ritter said the state’s budget for the next fiscal year doesn’t look much better.

He said the state could face a revenue shortfall of anywhere between $500 million and $1 billion. That comes on top of nearly $4.8 billion in shortfalls the Legislature and governor have had to fill over the past three years.

As a result, the governor also is freezing $40 million in severance tax grants that was to be awarded in local government grants next year.

“Most of the state’s funding is used for mandatory caseload areas — K-12 funding, corrections and Medicaid caseloads — and these areas are increasing despite limited state revenues,” Ritter wrote to the JBC. “Unemployment in Colorado hovered at 8 percent in July and more than 200,000 Coloradans received unemployment insurance from July 2009 to April. Over 380,000 people in Colorado received food stamps in fiscal year 2009–10, an increase of over 30 percent.”

Republican leaders in the Legislature said part of that case-load increase stems from Ritter and other Democrats who control the Legislature. They said the Democrats nearly doubled the number of Coloradans who qualify for Medicaid benefits over the past nine years.

Senate Majority Leader Mike Kopp, R-Littleton, said in 2001, there were about 275,000 people on Medicaid. But by this year, however, that had increased to more than 476,000.

“The Democrats’ partnership with Washington is not working for Colorado taxpayers,” Kopp said. “Colorado businesses and families cannot afford any more financial burdens because Democrats in the state Legislature and Governor Ritter speculated on federal funding and guessed wrong.”